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Wednesday, May 21, 2014

Coal means money - Ask ICAC

If you are one of the many people surprised at resistance to efforts:
  • to combat climate change and 
  • to replace fossil fuels with alternate energy supplies,
then you may need to consider the financial stakes of the vested interests clinging to coal.
These vested interests include State and Federal Governments and these are in addition to those of coal mining corporations that  mine and sell billions of tonnes of coal a year.

You may wish to estimate the yearly corporate revenues of coal mining corporations from
coal production worldwide that currently sits at around 8 billion metric tonnes
and estimate for these corporations the approximate book value of the reserves of coal needed to maintain that supply for 100 years.

The budgets of State and Federal Governments rely heavily on mining exports.

The Queensland budget in June 2013 forecast royalties from coal mining to be $11 billion over the next 4 years. They also show that the Queensland Government is forecasting annual revenue from these royalties to DOUBLE within 4-5 years.

The Queensland budget in June 2013 stated:
"Royalty revenue estimates revised down by $1.288 billion over the period 2012-13 to 2015-16, primarily because of reductions in coal price forecasts and a higher exchange rate assumption.

Revenue from royalties in 2012-13 is expected to be $548 million lower than forecast in the 2012-13 Budget. This weakness is largely due to export coal prices being significantly lower than expected, and the ongoing strength of the A$-US$ exchange rate.

Royalties are expected to recover from 2013-14 onwards, supported by steady growth in export volumes, a recovery in coal prices and the exchange rate depreciating."
Similarly the New South Wales (NSW) budget in June 2012 shows the extent to which the NSW government budget relies on coal mining royalties.

The New South Wales (NSW) budget in June 2013 revised sharply downwards the revenue estimated a year earlier but still projects growth in royalties in excess of 12 percent each year into the future. Budget papers at Chapter 6 explain:
"Royalties in 2012-13 are estimated to be down $573 million since the 2012-13 Budget reflecting softer coal prices and the high Australian dollar.

Royalties in the four years to 2015-16 are now expected to be almost $2.3 billion less than expected in the 2012-13 Budget, largely reflecting lower coal prices."

in Budget
2013/14 Budget
2012/13 Budget
2013/14 Budget
2012-13 $1.743 $1.878 $1.305
2013-14 $2.125 $2.112 $1.513
2014-15 $2.643 $2.363 $1.796
2015-16 $2.961 $2.518 $1.998
2016-17 $3.356 - $2.111